Australia to Regulate Bitcoin Exchanges

Australia’s Coalition Government announced a bill on Thursday that would regulate digital currency exchanges.

This legislation is part of the country’s first stage of reforms “to strengthen the Anti-Money Laundering and Counter-Terrorism Financing Act and increase the powers of the Australian Transactions and Reporting Analysis Centre (Austrac),” according to the announcement. Austrac is the country’s financial intelligence agency responsible for anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

Among other proposals, the bill will “strengthen Austrac’s investigation and enforcement powers” as well as “close a regulatory gap by bringing digital currency exchange providers under the remit of Austrac,” the announcement reads, adding that:

The bill provides a net regulatory relief to industry of $36 million annually, with the digital currency exchange sector being regulated for the first time, while deregulating low-risk industries such as cash-in-transit, which is already subject to state and territory licensing requirements.

Australia’s move is in line with some other countries in their efforts to prevent money laundering. In April, as the Japanese government started recognizing bitcoin as a method of payment, it also imposed strict rules on bitcoin exchanges in order to comply with AML and Know Your Customer (KYC) requirements.

Earlier this year, following investigations by the People’s Bank of China (PBOC), many Chinese bitcoin exchanges halted bitcoin withdrawals to extensively upgrade their systems for the purpose of AML and KYC compliance. Also the European Union has been discussing how to impose rules on bitcoin exchanges as part of its Fourth Anti-Money Laundering Directive.

Lawmakers Divided About Bitcoin

Within the Australian government, there are officials who are keen on bitcoin and also those who are more skeptical. News.Bitcoin.com reported in June on Australian left opposition leader Bill Shorten who indicated that he wants to deter the use of cryptocurrencies including bitcoin, citing their possible use by terrorists.

Meanwhile, the country ended the double taxation treatment of bitcoin in July. Recently, two senators proposed for bitcoin to be made an official currency of Australia in order to boost the country’s financial competitiveness.

Bitcoin trading volume in Australia has also been growing. On Localbitcoins, weekly volumes have been rising steadily over the years, and recently saw a spike of over $2.5 million AUD worth of bitcoin.

What do you think of Australia’s bill that will regulate bitcoin exchanges? Let us know in the comments section below.